The US Department of Justice is discussing a possible deal with Huawei’s finance chief Meng Wanzhou, according to reports.

The deal would reportedly let Ms Meng return to China from Canada, where she was arrested in 2018.

She would be required to admit wrongdoing in the case, according to the Wall Street Journal, which first reported the possible deal.

Ms Meng faces US charges over alleged violations of sanctions on Iran.

Bank fraud charges are for allegedly misleading HSBC in a way which might lead to it break US sanctions on Iran.

This week marks two years since Ms Meng was arrested on a US warrant while she was changing planes in Vancouver.

Since then, she has been fighting extradition to the US to face trial.

She is currently on bail and not allowed to leave Vancouver, where she has a home.

Negotiations between Ms Meng's attorneys and the US Justice Department picked up after last month's US presidential election.

Ms Meng does not think she did anything wrong and so is reportedly reluctant to make admissions that she does not think are true.

Politically motivated

Huawei and Meng are accused of conspiring to defraud HSBC and other banks by misrepresenting the company's relationship with Skycom, a suspected front company that operated in Iran.

US authorities allege Huawei used Skycom to obtain embargoed US goods, technology and services in Iran.

Ms Meng, who is the daughter of Huawei’s founder Ren Zhengfei, has long claimed she is innocent, arguing that her arrest was politically motivated.

The Trump administration has targeted Huawei, arguing that its equipment could be used by Beijing to spy, an allegation that the company has denied repeatedly.

The US put the Shenzhen-based telecommunications giant on its blacklist last year and has pressured other countries to exclude Huawei from their 5G networks.

The US now requires any company that sells US-made technology to Huawei to first obtain a licence.
Friction

The export restrictions have led to a shortage of vital components for Huawei, and prompted it to sell off its youth-oriented Honor handset brand.

Ms Meng’s arrest has created diplomatic friction between China and Canada too.

After her arrest, China cut off imports of Canadian canola seed and detained two Canadians on espionage charges, which are yet to be resolved.

Canadian Prime Minister Justin Trudeau has condemned the move, arguing that the two men are being used as tools in a diplomatic struggle between the US and China.